The Cost Of Recoupling: 235 S&P Points

Since late November and more so mid-December, the US equity market (and broad risk drivers) have decoupled from Europe's woes. The fundamental unreality (as we discussed here, here, and here) of this lagging performance and over-enthusiastic economist extrapolations has pushed the S&P to over 235 points over a 'fair-value' of 1050 (based on EURUSD's price). Even on a conservative basis - from the last real-decoupling point on 12/21, the S&P still stands almost 150 points 'rich' to a global-slowing European recession-dragging USD-based-earnings crushing 1.27 EURUSD.

Whoever junked you has obviously lost the ability to think for himself...

I'm not saying that ZH is wrong on this because over the last year we have seen many instances of decoupling between the ES and the more general 'risk-on Context' and there have been many really good trades to be had on the narrowing of the spread.

But simply asking for an even longer-term picture makes sense, even if only to confirm the scenario.

It has been. The floor under US equtie is much easier to control when vol is low. The PWG is having a field day with this. This is the Fiat Ponzi at its best: USTs selling to PDs and flipped to Direct. Check. Money fleeing the euro into the dollar. Check. Nation-States destroyed across Africa-ME-Asia. Check. Just another day in the life as a Central Bankster.

This is why I was horrible depressed yesterday. They did it. They won. They implemented the laws, they have their Fiat Ponzi rollin', and they are destroying all of the brown people across the globe. They will have their New World Order!!!! Muahahahahaha!

And in the dark of night after they have drank their wine, we creep up and....

"In my opinion, the Zero Hedge web journal is by far the most valuable and broad single source of relevant information in the global financial crisis, bar none... the intrepid indefatigable Tyler Durden (bloodied but resilient) of the Zero Hedge crew."

"The trend is your friend" is correct: the DXY/USD has been pushed up to nosebleed one-year highs. While this says something about the level of TRUE belief in QE3, it also acts as a secret weapon against shorts...

I'm no expert but support looks like 76 on dx/y, which would mean a 6.5% pop on the s&p at around 1370. This would probably scare the shorts out again and push the index to 1400 before we start the sell cycle all over again. Who knows? I'm using logic and their lies my dilemma

Everyone is short the euro not the market. They somehow (they always seem to) get the euro to rally and the dollar to sell off and bingo...the S&P runs and runs. A lot of people still short financials too. They will really get banged around. Then Greece tanks. The euro tanks and people rush back into treasuries and large US multinationals.....rinse...repeat.

...you said it, the USD decoupling is a myth, ES is only decoupling on the downside courtesy of the PPT, setting everything up for "blowout", "upside surprise" headline driven JPM earnings to start the show

I) Nobody pays us to post. II) we wish the best of luck to anyone who wishes to buy 10MM or more in physical silver without incurring 20%+ premiums on the order when all costs are factored III) the Sprott PSLV NAV spread has continued to leak wider, and nobody paid us to do that either.

I posted this to the original ZH article yesterday regarding another naysayer (no, I don't get paid for posting).

The replies are stuck at an eerie 666 so someone go say something before another conspiracy is hatched.

I see no conspiracies in the ZH article, only observations.

"Regarding the Daily Capitalist article criticizing this piece:

The Daily Capitalist (DoctoRx) seems to miss the point.

Key sentence from Tyler in this article: "In other words, someone is willing to pay up to 30% over spot for the right to be closer to the physical metal than merely have a paper claim on a paper claim (pre hyper rehypothecation and what not)."

The Sprott PSLV is not holding physical, but it gives a measure of what people are willing to pay to be closer to actually owning physical than MF Global "possession" of silver.

If people are willing to pay a 30% premium using the PSLV versus a certificate owned by Cede & Co. (DTCC), it gives a measure of the price strength (demand) for physical.

Do you trust Sprott to hold enough physical silver to back the ETF versus owning a certificate owned by DTCC? That is what makes a market.

Perth Mint does not incur any premium when it pulls physical out of London. Whoever is feeding you that is making a fool out of you. If you really are independent and after the truth, more than happy to chat with you anytime - you have access to my email in my profile.

Yep...it doesn't matter a wit that no one is left involved in the markets...according to all the failed pitch men on Wall Street. In fact, you might say that the failure in capital formation IS the reason the market has been able to drift up. Why not? After all, in the non market market, selling causes equities to rise, and buying causes declines.

It will take generations for any stitch of credibility to be restored to US markets. And so the Greater American will just roll on and on specifically because of this perversion of markets and the missallocation of capital.

The banksters think they are firmly in control now. So now is the time to go balls to the wall. How about everyone that is able retires, buys lovally, buys silver, and sits in on their capital building once a week? Yeah? What say you "hippies" of ol'? Remember, the times they are a' changin'.